ADVISORY OPINIONS
Appraisal Review
Answer:
The client has engaged Dan because of his identification as an appraiser;
this clearly creates an expectation by the client that the service will
be provided in compliance with USPAP. Therefore, this service is part
of appraisal practice; at a minimum
Dan must
comply with the portions of USPAP that apply generally to appraisal practice
(i.e. DEFINITIONS,
PREAMBLE, the
Conduct,
Management,
and Confidentiality
sections of the ETHICS RULE, the COMPETENCY
RULE, and the JURISDICTIONAL
EXCEPTION RULE).
Dan must next decide if compliance with STANDARD 3 is required. To do this, Dan must consider the intended use, intended user, and type and definition of value for the assignment. These factors are the basis of Dan’s scope of work decision. If the appropriate scope of work includes developing or communicating an opinion about the quality of another appraiser’s work that was performed as part of an appraisal, appraisal review, or appraisal consulting assignment, then that assignment is by definition an appraisal review. The label placed on the service cannot support acting outside of STANDARD 3. The client may call the assignment an “administrative screening review,” but it is the extent of the service that defines it.(note5) Dan must decide, based on the problem to be solved and scope of work, if the assignment is an appraisal review as defined by USPAP. If the assignment is an appraisal review, then Dan must comply with the development and reporting requirements of STANDARD 3.
There may be circumstances when Dan is not acting as an appraiser. If Dan acts in other roles, say as a mortgage underwriter, then Dan may be in position to provide the valuation service outside of appraisal practice. If Dan acts outside of appraisal practice, he must ensure that he does not misrepresent his role and that the client and any other intended users do not expect him to act as an appraiser.
USPAP 2008–2009 Edition
©The Appraisal Foundation